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Microsoft’s Bid for Yahoo!

In: Business and Management

Submitted By radium83
Words 2282
Pages 10
Microsoft’s Bid for Yahoo!

Timeline
As early as in late 2007, Microsoft proposed a number of cooperation alternatives with Yahoo! ranging from commercial partnerships to a merger, which were rejected by Yahoo!. Regarding to Microsoft’s proposal of acquisition in 2008, here are some key issues:
Late 2007
Yahoo! rejected partnerships or merger proposal from Microsoft
31/1/2008
Microsoft announced its bid for Yahoo! at US$31/share
11/2/2008
Yahoo! rejected the offer, saying that it undervalued the company
28/2/2008
Google released news that with willingness to acquire 20% Yahoo share
6/4/2008
Final call from Microsoft – threatened Yahoo! Board with a proxy battle
2/5/2008
Yahoo! asked for US$37, Microsoft rose to US$33
4/5/2008
Microsoft withdrew US$47.5 buyout offer
5/5/2008
Yahoo!’s value dropped to $34 billion
17/5/2008
Yahoo! accepted the price $33-34, but Microsoft only interested in search business, Yahoo decided instead to sign a search advertising deal with Google. Microsoft’s Motivation of Acquisition
After the failure of the deal, Steven Ballmer was made fun by the public that his greatest contribution during his tenure was: not able to close the deal. Why would Microsoft pay such high cost to acquire Yahoo! at the first place? As we know, Google was the dominant player in this industry and it kept consolidating its dominance through acquisition. Microsoft was eager to content against its biggest rival. The combination will create a more efficient company with synergies in four areas: scale economics driven by audience critical mass and increased value for advertisers; combined engineering talent to accelerate innovation; operational efficiencies through elimination of redundant cost; and the ability to innovate in emerging user experiences such as video and mobile. Microsoft believed these four areas…...

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